Altria Group Inc (NYSE:MO) announces the expiration of its previously announced cash tender offer for any and all of its senior unsecured 9.95% Notes due 2038 (the “2038 Notes”) and any and all of its senior unsecured 10.20% Notes due 2039 (the “2039 Notes” and, together with the 2038 Notes, the “Notes”). The terms and conditions of the tender offer are described in the Offer to Purchase, dated September 13, 2016 and the related Letter of Transmittal and Notice of Guaranteed Delivery.

The tender offer for the Notes expired at 5:00 p.m., New York City time, on Monday, September 19, 2016 (the “Expiration Time”).

According to information provided by Global Bondholder Services Corporation, the Depositary and Information Agent for the tender offer,$441,081,000 aggregate principal amount of the 2038 Notes and $492,961,000 aggregate principal amount of the 2039 Notes were validly tendered at or prior to the Expiration Time and not validly withdrawn, which amounts include $1,187,000 aggregate principal amount of the outstanding 2038 Notes that remain subject to guaranteed delivery procedures and $1,165,000 aggregate principal amount of the outstanding 2039 Notes that remain subject to guaranteed delivery procedures.

Altria expects to accept for purchase all Notes validly tendered and not validly withdrawn at or prior to the Expiration Time. The conditions to the tender offer having been satisfied, Altria, therefore, expects the payment for the purchased Notes, including Notes delivered in accordance with guaranteed delivery procedures, to be made on September 22, 2016.

In addition, holders whose Notes are purchased in the tender offer will be paid accrued and unpaid interest on their purchased Notes from the last applicable interest payment date up to, but not including, the payment date for such purchased Notes.

Deutsche Bank Securities Inc., Goldman, Sachs & Co., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are acting as the Dealer Managers for the tender offer. Investors with questions may contact Deutsche Bank Securities Inc. at (866) 627-0391 (toll-free) or (212) 250-2955 (collect) and Goldman, Sachs & Co. at (800) 828-3182 (toll-free) or (212) 357-1039 (collect). Global Bondholder Services Corporation is the Information Agent and Depositary and can be contacted at the following numbers: banks and brokers can call (212) 430-3774 (collect), and all others can call (866) 470-3900 (toll-free).

This press release is neither an offer to sell nor a solicitation of offers to buy any securities. The tender offer was made only pursuant to the Offer to Purchase and the related Letter of Transmittal and Notice of Guaranteed Delivery. The tender offer was not made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. Please refer to the Offer to Purchase for a description of offer terms, conditions, disclaimers and other information applicable to the tender offer.

2016 Third Quarter Charge and 2016 Full-Year Earnings and Tax Rate Guidance

Based on the Total Consideration specified in the table above and the amount of Notes validly tendered and expected to be accepted for purchase,Altria will record a one-time, pre-tax charge against reported earnings in the third quarter of 2016 of approximately $825 million, or $0.28 per share, reflecting the loss on early extinguishment of debt related to the tender offer (the “Charge”).

Altria reaffirms its previously announced guidance for 2016 full-year adjusted diluted earnings per share (“EPS”), which excludes the Charge and the special items for the first half of 2016 as shown in Schedule 1, to be in the range of $3.01 to $3.07, representing a growth rate of 7.5% to 9.5% from an adjusted diluted EPS base of $2.80 in 2015, as shown in Schedule 1. Altria expects that its 2016 full-year effective tax rate on operations will increase from approximately 35.3% to 35.4% due to a reduction in certain consolidated tax benefits resulting from the tender offer. This guidance does not include any impact from the anticipated business combination between Anheuser-Busch InBev SA/NV (“AB InBev”) andSABMiller plc (“SABMiller”), including effects from the anticipated reporting lag described in Altria’s second quarter 2016 earnings press release, as the transaction remains subject to certain approvals.

Altria’s full-year adjusted diluted EPS guidance and full-year forecast for its effective tax rate on operations exclude the impact of certain income and expense items that management believes are not part of underlying operations. These items may include, for example, loss on early extinguishment of debt, restructuring charges, SABMiller special items, certain tax items, charges associated with tobacco and health litigation items, and settlements of, and determinations made in connection with, certain non-participating manufacturer (“NPM”) adjustment disputes (such settlements and determinations are referred to collectively as NPM Adjustment Items).

Altria’s management cannot estimate on a forward-looking basis the impact of certain income and expense items, including those items noted in the preceding paragraph, on its reported diluted EPS and its reported effective tax rate because these items, which could be significant, are difficult to predict and may be highly variable. As a result, Altria does not provide a corresponding U.S. generally accepted accounting principles (GAAP) measure for, or reconciliation to, its adjusted diluted EPS guidance or its effective tax rate on operations forecast.

The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to this forecast. (Original Source)

Shares of Altria closed yesterday at $62.72, down $0.08 or -0.13%. MO has a 1-year high of $70.15 and a 1-year low of $53.68. The stock’s 50-day moving average is $65.34 and its 200-day moving average is $64.05.

On the ratings front, Altria has been the subject of a number of recent research reports. In a report issued on September 15, CLSA analyst Michael Lavery maintained a Buy rating on MO, with a price target of $68, which represents a potential upside of 8.4% from where the stock is currently trading. Separately, on September 13, Citigroup’s Adam Spielman initiated coverage with a Buy rating on the stock and has a price target of $72.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Lavery and Adam Spielman have a total average return of 2.0% and -2.0% respectively. Lavery has a success rate of 37.5% and is ranked #2209 out of 4166 analysts, while Spielman has a success rate of 0% and is ranked #2805.

Overall, 2 research analysts have assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $71.00 which is 13.2% above where the stock closed yesterday.